Afford Anything - How Aaron Epstein Went from Side Hustler to Selling a Multi-Million Dollar Company

Episode Date: March 14, 2016

#16: Aaron Epstein shares his story of shoveling snow as a kid to launching a profitable website during college to selling a multi-million dollar company. For more information, visit the show notes at https://affordanything.com/episode16 Learn more about your ad choices. Visit podcastchoices.com/adchoices

So, Jay, I am super excited about this interview that's coming up. It's so far my favorite. How do you know that already, Paula? You're like super, super quizzy over there. Quizzy. What the Quizzy? What the hell? Quizzy. Welcome to the Paula and Jay Money show, a podcast about growing wealth and financial freedom. Your host, Paula Pant, is a world traveler who built financial freedom through real estate investing. She runs the website affordanything.com. Host Jay Money is a husband and father of two, striving for financial freedom. He hates real estate but loves to blog for a living over at Budgets Are Sexy.com. Which one resonates with you?

Grab a beer and find out as you listen to the Paula and Jay Money Show. Hey, Jay, guess what we finally got? A podcast. What else? A sponsor. A sponsor. Somebody likes us, enough to pay for us. Yes, our good friends over at Digit, that Paul and I,

both have loved, and we've talked about on the show before. They're basically the service. You connect your checking account with them. They're awesome. Every few days, they transfer a micro dollars a few dollars apiece over into your account. And they basically help you save money automatically for doing nothing. Yeah, exactly. It's awesome. So I signed up for Digit probably about a year ago,ish, and linked Digit to my checking account, and then just ignored it. I just let it hum in the background. Everything was totally automated. And one day, months later, I checked my digit balance and I had saved $814. And I just brought up my amount.

I've been there for about 13 months and I've saved exactly $3,284. Wow. Which is pretty good for people that already do money and we're supposed to be good at saving. So it helps us save even more, which is great. Drinks are on you, Jay. So if you want to check it out, it's totally free for you. And you can sign up at The Money Show. dot co slash digit. That's the money show.

dot C-O slash digit. And digit is spelled. D-I-G-I-T. Look at you in the jingle. I know. I figure it, you know, it helps people remember how to spell digit. Because it's kind of a weird word to spell. A weird word with awesome savings. I'll take it every time. Jay, I am super excited for today's episode. Why is so excited?

We've got this awesome guy named Aaron Epstein, and he's going to walk us through the many levels of being an entrepreneur. Starting with when he was a little kid showing early tendencies of entrepreneurship, he walks us through being a college student who was incredibly savvy for his age and did a lot of things that young people could really learn from. Once he tells us that story, he then transitions into talking about how he started a six-figure lifestyle business. So he was making really good money, and he had a pretty cush lifestyle. And for most people, that would be sufficient. They would end the story there. But Aaron decided to level up even more and run a real grown-up company with funding and multiple employees and all that jazz. So he actually walks us through it and tells the story in a way that's very relatable and in a way that makes us think, wow, I could have a big-time company as well.

And then he eventually soared the company and he walks us through that process. So I just, I love the narrative throughout Aaron's story. And I love how relatable it all is. Even though he really hit the big time, you still feel like he's one of us. He's very super nice, too. He's just a genuine dude. I played football with him for a couple of years. And I had no idea how awesome and smart he was in business or any of this story.

So he's a great down to earth, dude. Awesome. So let's get started. Welcome to the show, man. It's so cool to talk to you. I mean, I was telling Paula, you and I've been friends. I don't know, in real life, for how long now? 10 years?

Yeah, probably something like that. So you're in a sandprint now, and like everyone, especially in the startup scene, that's all that you guys talk about, right? That's like everything. Oh, yeah. That's life. Yep. There's a startup bubble here and everything.

Yeah. Well, cool. Well, let's start from, oh, you chiming in there, Paula? No, I mean, this leads perfectly into a, so what do you do? And how do you do it? Yeah, start with like in college and work you way up a little bit just to give us everyone, you know, the full picture. Cool. When I was a freshman in college, I started a web design company with some friends. And so this was 1999. I went to the University of Maryland. So we were doing

a lot of websites for clients. And what I found was typically clients would have, they'd give us their logo. And we had to design a website around their logo. And typically their logo had one color in it. And so I was always doing this guess and check game in Photoshop where I was like clicking on different colors. Like, does this work with their logo? Does this work with their logo? And I was like, there's got to be a better way to do this where, you know, like a digital color wheel almost, where I give it a color, and it tells me what colors go well with that color. And so this was 1999. I couldn't find anything like that on the web, couldn't find any software that did that. I did the research behind like the color theory and everything. And I ended up just building this

web-based tool over my spring break freshman year. It was called color schemer. Turns out, like a lot of other people had the same kind of problem that I had with picking colors, and it became pretty popular. And so I realized if I made this downloadable desktop version of it, I could charge money for it. I could add more features. And so I released a PC version and had sales from day one because I linked to it for my free web-based tool. And so all through college, I was making like $1,400 bucks a month, which was awesome as a college student. How much beer money that is? Yeah, so I never had to hit up my parents for money. It was awesome and did that for a number of years. And all I had to do was just answer customer support and develop new versions of the software on my own time whenever I felt like it.

Went through college doing that and graduated. I was like, all right, I'm going to see what I can do with this. Okay. Can we pause here? A lot of the listeners are probably at this point wondering how on earth, as a freshman in college, how did you have both the skill set and the foresight and the maturity? I mean, you're like 18 years old. Especially on the maturity angle during spring break. Yeah, exactly. It was one of those things where, so I guess I'll back up a little bit and say I was the kid growing up that when it snowed or when the leaves started to fall, I was knocking on all the neighbors' doors. Yeah, I was hitting them up like five bucks to shovel your driveway kind of thing.

So I've always had this like entrepreneurial spirit. I remember in middle school, I'd go buy those five packs of like bubbleish scoes. gum at CVS. My parents would take me. I bought some people like you in Lollipop. Yeah. I was like a gum dealer in middle school. Sell them for like a buck for each pack.

You know, I had baseball cards. So like I'd be setting those up literally on the street corner when I was like eight years old trying to sell baseball cards, which, you know, I learned a little bit about, you know, going where the customers are during that time. It wasn't the best place to sell baseball cards. But I was always into that kind of stuff. And so when the web started becoming a thing and it was still brand new, you know, I realized I couldn't make a car as good as Ford, but I could make a website as good as like Coca-Cola's website.

This was like 1994, 1995 because everybody was learning it at the same time. And so I love being able to kind of like control that whole creation process. I can make something as professional as anybody else all by myself. And so I taught myself how to make websites and taught myself about design and programming and all this stuff. What was the programming back then? It was like all HTML. Yeah, so it was all HTML. There wasn't even JavaScript. I remember when like the image tag was introduced on websites. So this is like way back in the day. They had gifts back then and then they had they come back.

Right. Well, how else would you show that your website was under construction and let people see it to turn the ears behind the page? That's right. So I love being able to control that whole process. And so that's what got me into making websites. When I was in high school, I took a computer programming class. So that taught me a lot of the basic fundamentals of programming. But then, you know, I feel like when you're learning something or when you're working on a project, you get really passionate.

You see that vision and you want to get to that end goal. And so that's what it was for me. I was like, oh, I know this tool that I want to build that can match color schemes. And I wasn't like the best programmer in the world. but I figured out all the different parts that I needed in order to get to that finished product. That's why, you know, spring break, I had a lot of free time. I wasn't like going down to Mexico like a bunch of other kids were. And I was just like really driven to like see this vision that I had in my head come to reality.

And, you know, it paid off. Did you go to the school of business? I can't remember. Yeah, so I was a business major at Maryland. Okay. Because I feel like at some point of knowing you, you told me that you never really had like a real job. you went right into like this business stuff. Do I have that right or am I making that?

Yeah, kind of continue the story. So I graduated. I was like, okay, I'm making $1,400 a month on this. Like, let's see what I can do with this. And I released new versions of the software. I made a Mac version of the software. You know, I made $75,000 in a year and then $100,000 in year. And then $130,000.

And so it's growing as I was focusing on building this business. I graduated in 2003. and I did that by myself all the way until 2009. So this was six years, really like nine years or almost 10 years from when I actually started it in college, but six years from when I graduated doing it full time. And I could pick my own hours, I could work from wherever I wanted. Oftentimes I would work till like four in the morning. Just because that was like the quiet hours when I was most productive.

Ultimately, towards the end of that period there, I got bored of it because it was so automated. And I started looking ahead and thinking about like, okay, do I want to keep making new versions of color software for the rest of my life? You know? And that wasn't super exciting to me. Oh, come on. Where's the spirit? Well, so I had a good run. You know, it's fun for like nine years or so.

But I was like, I don't know that this is going to be the thing that puts my kids through college, right? And so I was always looking at it as something that was like, it makes me good money. Like it lets me, you know, live this lifestyle business. kind of day-to-day thing that I like. But I reached a point where I was like six years of doing it full-time. And I was kind of like, I want to grow. I feel like I'm sort of stuck in a rut, like doing the same things. Everything's so automated. And, you know, I wanted to do something with a bigger team and grow a team and continue to grow as a person. What's really interesting to me about that is that so many of the people I talk to,

so many people in my audience, the thing that you're describing is their end goal. You know, They're like, I would love to have a lifestyle business that's laptop-based, it's location independent. I'd love to be able to make six figures a year through a lifestyle business. And that's the end goal. And so it's super interesting to hear you say, I did that. And it was great for a while. But then I started asking myself, what's next?

Yep. The idea that anything can turn into a rut. Right. And it was probably always my dream, too. When I was probably 12 or 13 years old, it was my parents' 20th wedding anniversary. And my dad worked at the same company for 33 years, which never happens anymore, right? So for my parents' wedding anniversary, my dad was working on this really big contract at work. And so he would sometimes stay overnight at the office, you know, working crazy hours.

And so for their anniversary, my mom and my brother and I, we drove down, you know, 30 minutes to Virginia where he worked. and we picked him up from the office and we went out to eat at Ruby Tuesdays and then we dropped him back off at the office and that was my parents' 20th wedding anniversary and I remember from that moment saying to myself, I never want to let my job or my work dictate the time that I can spend with my family. And so this was always my dream too to have this flexibility and freedom where I'm making money but working whatever hours I want and I can choose. You know, ultimately I got bored of it, one, but two also I was like in my 20s, maybe something like that when, you know, in my 30s or 40s with kids growing up and wanting to be more present for them would have felt different to me.

But at the same time, like I also felt like this was the time for me to grow and learn new things. And I had kind of tapped out what I could learn on my own and needed to get some new experiences. And this is where the juicy part comes in because this is where you invited me into your next adventure here a little bit just to get a taste of it. But yeah, continue on. I like the story so far. Good. I'll keep telling it.

Yeah. Keep doing the juicy ones, too. All of your dad's failures. Wow. Yeah. Who's awesome. He looks exactly like Larry David, by the way. Like when I saw him, it's so funny.

Yeah. And by the way, he's proud of that when people come up to him. And they're like, has anyone ever told you you look like Larry David? He says, why thank you? And I'm like, really? That means you need a haircut, you know? Who's Larry David? And now they call him beer.

What? What did you say, Paul? Who's Larry David? Oh, Lord. That's a whole other podcast. He's a creator of Seinfeld. I've a show on HBO, right? Yeah, he's hilarious, you know, very popular comedian.

But does your dad ever get Bernie Sanders now, now that he plays him on S&L? Right. I don't know. I haven't talked to him recently about if he's been getting Bernie Sanders, but... I'll call him up to ask him. Yeah. I'll call him Bernie Sanders, so that way it's official. I don't know if he'd appreciate that, though, because Bernie Sanders is almost 10 years older than him.

So, at least with Larry David, like, they're about the same. All right. All right, continue on, good sir. Yeah, so I was getting bored of doing this lifestyle business by myself, and I was looking for kind of the next big thing. So in 2007, I had met up with this guy. His name was Darius. He was the founder along with another engineer called his name is Chris.

And they were the founder of this website called colorlovers.com. And color lovers was this design community where people would create and share color palettes and patterns. and shapes and things like that, and had over a million members. And so here they had this color community, and I had this color software. And so we got together in 2007 to talk about,

like, maybe there's some kind of partnership we could do. I had this community that was kind of built around my software, but it was very small, and it was so people could share the color palettes they were creating with other users of the software. Darya said, well, if you take down your community piece, like we'll promote your software. And I said, that's great.

I'm not really trying to grow up. community though. I'm just trying to sell more software, but I can't take down my community piece because it's kind of a competitive advantage for me. And I was like, how about I'll just, you know, promote your community and you promote my software. And we left that meeting and we said, okay, cool, let's do that. And about a week later, he shoots me an email and he says, so I talked to some potential investors and they really feel like, you know, we should own our own color software. And so, you know, I'm not going to be able to promote you. It's not going to work. And so, yeah, so I was like, I was upset about it.

And I was like, okay, well, then I'm going to have to go out and just try to crush you guys and become like a public leader. So that's what I'm thinking. And so I send him an email back and I said, hey, that's cool. Like, let's keep in touch, right? And so I wasn't totally bored of doing the color scheme or thing at this point. Fast forward two more years to 2009. I had, you know, continued to release new versions of the software, was making, you know, more money doing that. So I'd grown the software business, and they had grown their community to, like, well over a million members, and was becoming really popular.

And Darius had actually gotten recruited by Microsoft to go work on their live labs incubator team. And he made it almost a year there, and he was just, like, really struggling to be at a larger company. And so as he was leaving, he shot me an email in 2009. He was like, hey, you're still doing that color scheme or thing? Like, we should connect. And so at the time, it was perfect timing because I was looking around for what that next opportunity was going to be. And as soon as he got back in touch, I said to myself, like, this is it. This is what I want to do. And so we got together over a weekend end of the summer in 2009. And we just hammered it out really quickly of how we were going to merge our two businesses together and try to form this new business going forward.

All right. So now you're thanking your, you know, angels that you didn't like curse them out or do something stupid to burn bridges, right? That you know there's no way in hell that email when it came out. Or maybe he's a cool guy. Yeah. So I think ultimately what it was is, you know, I had a lot of respect for him and for Chris and what they were building kind of from afar. And so, you know, we were familiar enough with each other. And, you know, they had a lot of respect for what I was building too.

And so it made it really easy for us to kind of merge our things together and and try to, you know, go forward with this bigger vision. So now you guys are all combined. Is this still color lovers? Yeah. So this is still color lovers and colors. schemer. And so shortly after that, Darius, if any of your listeners are familiar with Y Combinator, they're one of the biggest tech incubators, startup incubators based out of San Francisco.

The founder of Y Combinator, Paul Graham, they put on this event that's called Startup School. While Darius went to that, he had moved down to San Francisco shortly after we merged up to go to the startup school and live here with his now wife. He went to the startup school and Paul Graham, saw he had a color lover's shirt on and said like, oh, color lovers. I love color lovers. Oh, wow. And Paul Graham's like massive in that community. Like if you're in the startup world, not like a normal person, but like if you're into Hacker News and startups, like he's the man. Yep. So everybody knows who Paul Graham is. And so I remember I was sitting on my couch in the D.C. area in the townhouse that my wife and I had bought like two years earlier. My wife had actually

just gotten a job up at the Food Network in New York City. Darius sends me this text and he's like, like, hey, if we could do Y Combinator, would you want to do it? I remember writing back to him, I'm like, we got to find somebody to rent our townhouse. We got to find a place to live in New York City. Like, we've literally got a month to do all of this. And then I was like, let's do it. And, you know, ultimately, these kinds of opportunities don't come along very often. And when they do, you really just have to take advantage of them.

And so everything ended up working out. Like within that month, we found renters to rent out our townhouse. found a place to live in New York City. And then we found a place to live me and my co-founders out in San Francisco while doing the three and a half month Y Combinator program out there. And so the week after Christmas in 2009 moved my wife up into our apartment in New York City and right after New Year's. I was like, all right, I'll see you in three and a half months and flew out to West Coast. Wait, and tell the people to our audience in a summary what that three months looks like and what it's about, like why you guys have to be there for those three months.

Yeah, so basically the way the program works is it gives you really great access to other top startups, to top investors. The way it works is they give you a little bit of money. So in our case, they give us $30,000, which was like more money than we had ever seen in our bank accounts. Basically, they give you this money so that the founders can take that three month period, they live off of that money, and they try to build like version one of their product. And And then at the end, you have a demo day where you pitch, you know, the product that you've built and the company that you're building to a lot of top investors. And then theoretically, you'd raise more money at that point. And then you would be kind of off to the races to go build a big business.

And so for us, the thing that was a little weird was like, it's changed now. But at the time, this was the beginning of 2010. A lot of the people coming into Y Combinator were like two people just out of college or maybe we're dropping out of college to come do this. And here we were, we had been running these businesses for a number of years, you know, making money. Most people are just trying to launch the first version of their product. And for us, we were actually trying to figure out, okay, we're making money today. How do we build this into like a big scalable business? Yeah, yeah, you guys are in because most people, like how many, they have an idea or a little version in their head and they get there and they go through all the process and they come out with a shiny new company.

Yeah, you guys are already pretty successful. So apparently he already uses your or at least knows about color lovers. So you're doing okay already. Right. So we had some name recognition for the business that we were building and everything like that, but we still weren't making a ton of money. So kind of our goal during Y Combinator was to figure out how to build this into a big scalable business. Also, the Y Combinator program is basically you live on your own.

And once a week, it was on Tuesdays, I think, we would go to the headquarters in Mountain View. and there would be a new guest speaker every week. And so one week it was Mark Zuckerberg, top angel investors, top VCs, people that raised like $40 million and then ultimately their company failed. So it was people that were doing like really cool things with a lot of like really great insight and stories to share. What was missing for me when I was doing, you know, my own thing, the same thing day and day out for a number of years. I didn't feel like I could look back at three years prior and be like, oh, I can't believe I did this. Like, I totally know how to do it better now because I was doing the exact same things,

you know? I feel like the most important piece for me over my journey is being able to look back and say, like, I can't believe I did that. I know so much better now. Like, that's personal growth. Yeah, no, you're right. And I feel like there's a bunch of pieces here. One, you do have to be relatively smart, like, no matter what.

Like a dumb person, A, would never get into or at least like in business into like Y Combinator. But then you have to have like the passion, like those two things. things have to be pretty good, or at least willing to, like, fail a lot and keep and keep twisting and keep iterating and learning. So, yeah, so you being immersed in that was just crazy, and I loved it. I mean, it was all, oh, man, like, and actually, when I was there for people that knew about Love Drop, you know, five years ago, actually when you were there, yeah, it's almost been five years now. We launched Love Drop, our charity, and I had this idea in my head, and I came across this dude, Nate St. Pierre, that was doing something similar and we merged. And later

that year, we created LoveJop. So it was because of that trip that, like, I have a best friend and business partner, Nate, because you forced me out of my comfort zone. And actually, dude, Aaron's a guy for those that like Digit and learn that knows, you know, the savings app. Ethan Block, Aaron introduced me to who founded this company Digit. And when I was there visiting Aaron, we had lunch because some of your people like, you know, the savings app. I'm going to be met up for like breakfast or lunch or like bar like for a beer right um and one time you invited me to a breakfast and again i went there like oh do-d-da-da-da i don't know what i'm doing you know i just sat and listened so i wasn't an idiot you know and i remember like Ethan he had some company i think

it was like flowtown or something yep and you guys were talking about like growth and analytics and i was like i don't know what the hell he's talking about but it's cool to be around and then four years later you said hey there's this dude Ethan that like create a digit um i think you'll like it, you know, and you put us together. And I was like, I don't know, another app, right? But I fell in love with it. It's like my favorite, you know, tool. I've saved like $3,000 this year alone using it. And when we got to talking, I realized that that was the same dude from all those years ago because you forced me, again, out of my comfort zone and to network and be around it. Even if I didn't talk, at least I was like soaking it up, right? Anyways, not to get all mushy here, but, you know,

because of you, like my confidence in my, you know, even this podcast, right? Like a lot of stuff could be different had that weekend not occurred. Yeah, well, I'm glad to hear that, but ultimately, you're the one who had to take those different leaps. Yeah, it takes two to tango. Yeah, ultimately, it's just like us, me and my co-founder is doing Y Combinator. It's like those kind of opportunities present themselves if you put yourself out there. And ultimately, it's up to you to like take advantage of those opportunities because it could

have been very easy for you to be like, no, I'm good where I am now or something like that. But you didn't. And so that's why these new things came. Can you name off some of the other companies that came out of Y Combinator, like some of the ones that people would know? Like Airbnb, they came out of? Yep. Yep, Airbnb, Dropbox, Reddit.

Weebley is another really big one that's kind of under the radar, like website design tool. Yeah, right. Posterous was another one. They were kind of like, they were neck and neck with Tumblr for a while, and then Tumblr ultimately started to take over. Okay. There's a ton of companies.

Wattsy is like a really incredible nonprofit. So Wycombinator has started funding nonprofits. They're now expanding to start to fund research projects. They're going to do a study. They're going to fund a study around basic income, which actually, now that I realize, might be really interesting for you guys. You're an alert, yes. Taking a look at what happens if you gave everybody some basic level of income.

How does that, are people's lives impacted? How is the economy impacted, that sort of thing? Is that like that dude that decided? pay its whole company 75,000 across the board and like... It's probably similar to that, yeah. Okay. Yeah, that's fascinating stuff. Maybe we'll just call Paul Graham and see if he wants to come on the show and talk to us.

Yeah. That's not busy. Yeah. He's actually, he's stepped away from running Y Combinator full time and Sam Alton is now taking over. And Paul Graham, I think, is basically just focusing on writing his essays and things like that, which are really great. So check out his website and read some of those, which I was found to be really

inspirational and insightful even before I ever did Y Combinator. All right. So here you guys are. You're doing good. Then you merge up. You get into Y Combinator. Things are going good. What happens at that point?

And specifically in like the investing type of when you're pitching, like does anything come out of that part? We're trying to figure out like, okay, what's the big scalable business that we're going to build out of this newly merged company that we have? And so there were two different directions that we were looking at. The first was like this color data company. Because here we had all these people that were interacting around color palettes and patterns and things like that on the website. And so we could tie demographics to that.

If you're familiar with like Pantone, they put out these color trend reports every year that say like the color of the year for 2016 is going to be fuchsia. And it's really just kind of like based on nothing. You know, they justify it with this like, well, based on economic conditions and blah, blah, blah. Like people are feeling very fuchsia. and it always felt kind of funny to us because we're like, this is really just a couple experts getting in a room and deciding what it's going to be. But then they put out these trend reports and like the fashion industry gets like the fashion trend report. And they see like, oh, it's fuchsia.

And then they start designing and manufacturing clothes that are fuchsia and them. And then Pantone gets to say like, look, see, we were right. But it's really this self-fulfilling prophecy that, you know, they are the experts. They put it out. and everybody else just kind of follows along. So we had this vision of basically doing like crowdsourced color trend reports where we could tie demographics to, you know, all the interactions that we had on the site. And we could tell you like, okay, you're Microsoft, you're rebranding the Xbox, 18 to 24 year old

males, like these colors are trending. These are not. Like they like these combinations. That's much better than like a generic, you know, industry-wide trend report that everyone gets the exact same thing. Yeah. So that was one direction we thought about. The other was like this marketplace concept where here we have a lot of people on the site that are creating graphic design content.

And so, you know, maybe there's a way for them to monetize that and we could build a marketplace off the content they're creating. And so we actually initially thought the color data thing was going to be like the big opportunity for us. And so we actually weren't even thinking about raising money during Y Combinator. a couple weeks before the demo day at the end, we were like, we have this really great opportunity to get ourselves in front of these investors. Maybe we should just try to raise money. We tried to raise money around this color data idea. We got a lot of investor interest and we had a lot of meetings. You know, we had a bunch of commitments from people. We also had people that were like, how big could this market be? You know, if Pantone is kind of like the big market leader right now and they're not that huge of a company as far as like, you know, investors are typically looking at. multi-billion-dollar opportunities, and Pantone a couple years later ended up selling for like $180 million. Like, if that's the ceiling for the dominant market leader, you know, that wasn't as exciting for a lot of investors.

We also were having issues like scaling the site because we'd gotten all this new traffic. And so we decided to put the fundraising on hold at that time after Y Combinator and like stabilize the site and figure out like which direction like we really wanted to go in. It was probably Thanksgiving of that year. This was 2010. Matt Life reached out to us because they were doing a Thanksgiving rap kind of display on the first two floors that they're building across from Bryant Park in New York City. They wanted to use a pattern that a member had created on color lovers as like the background for that entire rap. And so they wanted to pay $250.

And we basically took that and we gave it all to the person who created it. But the light bulb went off in our heads where we were like, here's somebody who's just playing around with the tools that we have on our site, just kind of like being creative, having fun. And they've actually created something that's really valuable for this business where they're willing to pay $250 to use it. That was the moment where we're like, okay, the marketplace is the way to go. And so we decided to go full on, like building a marketplace around color lovers.

And we ended up going back to a lot of those investors we had talked to before and telling them like, hey, we have this new direction that we're going down. it was a much easier sell than the color data thing was at that point. And we ended up raising about a million dollars from a lot of really big VCs and angel investors. And so we set off to build this marketplace around the color lover's site. And there's only three of you, right? Yeah, there's only three of us. But now we had raised this money, so now we could start to hire people and we could be able to, like, build it faster and grow the business faster.

And so we started building this marketplace around the color lovers site. And we actually realized, like, this marketplace is much bigger than what we have on color lovers. You know, besides colors, palettes, patterns, there's tons of other elements that go into any type of creative projects. So there's like fonts and Photoshop files and stock photos and website themes and all these other different things. And so we realized, like, this is actually much bigger than what we're building on color lovers. That's what led us to create creative market as kind of like the new marketplace business that we were going to focus all of our time, energy, and resources on building. And that's going to be separate from color lovers, or was it kind of like connected?

So it was the same business. You know, we had raised a million dollars at that point. We'd probably spent half of it trying to build marketplace on top of color levers before we realized like this is not the right approach. You know, we should make this a separate thing. And then even at that point, it was a really different. decision for us because we had, you know, we probably had one to two million members on color lovers at that point. We had this difficult decision like, do we start creative market with brand new user

accounts with zero users and kind of like, not necessarily throw away everything that we had built to that point, but kind of like start over? Or do we let people sign up with their color lovers account and things like that and start from this, you know, existing base? And ultimately what we decided to do was to start over from scratch, but we used the color lovers community and all of that member base to try to promote the new creative market site that we were building. So we were using it as like a marketing vehicle. And also when we were getting ready to launch the creative market marketplace, we had this teaser page that we put up and we would say like from the creators of color lovers. Nice. Nice.

It was known kind of to the community there. And so people would trust like, okay, I like color lovers, you know, I'll probably like this. Like I'm going to go ahead and sign up early. did you make the decision to start from scratch? There were a couple of reasons. Like, one, it was just kind of messy, starting with this legacy of color lovers and building this new business that we felt, you know, had the real big potential to, um, to be scalable and grow really quickly. So for a couple years, actually like from Y Combinator through our decision where we decided

to go full on with creative market, we tried so many different things to monetize, uh, the color lovers community. And so obviously, you know, we, sold ads, but we tried lots of other kind of like clever things where we would run these contests where people could design like socks, like the stripes of socks, pick out the colors. And those were like hugely popular with the community, but didn't make us a lot of money. And we tried things. We had a partnership with Martha Stewart Living where all the palettes in colors on the site

would show the closest matching Martha Stewart paint color. And then we would link off to Home Depot so you could buy like a sample can. and just have it delivered. We ran the gamut of ways to try to monetize this site, and nothing really worked. And we ultimately realized, like, we have a lot of members that signed up, and they love to, like, come and play on the site and be creative,

but they're not there to spend money. And so what we wanted to do was start from scratch where all the members would come there to buy content and to spend money. And so, you know, we wanted to not all users are created equal. We figured we could convert over the ones, out of our million plus color lovers member base to sign up on creative market. And everybody else probably wouldn't have bought anything to begin with. And investors, they didn't freak out when you're like, oh, yeah, we're going to slowly

just create something from scratch, and we've already spent half a million dollars and we're going to use up the rest. Like, where do they, in this process, do they give you freedom? Do you have to convince them on all these major things? Like, that's my fear of investing is like they start owning and directing. Yeah. At least in the San Francisco Silicon Valley investor startup world, especially at the seed stage, which is kind of like the first initial money that a company raises, I don't see a ton of that. It's really investors that are investing money because they believe in the founding team.

And the vision sounds exciting, but like, hey, I trust that you guys as the founders are going to be able to figure out how to make this work. So you hear stories of like Instagram, for example, people invest in. in Instagram, but it wasn't Instagram. It was called Bourbon, and it was kind of like a social network. And it wasn't really taking off at all. The founders decided they're like, you know what? The social network's not taking off. We're seeing a ton of engagement around people sharing photos on the platform. And so they basically changed the product to just be this photo sharing thing called Instagram. And so that totally took off. But the initial investors didn't invest in Instagram. They invested in what it was before that. And they just trusted.

that even if that wasn't going to work out, the founders would figure out a way to build a business out of it. I didn't know that. Hey, how's Instagram doing? Did they do good? Yeah. Actually, so those investors, And Drison Horowitz, is one of the big VC firms. They invested $250,000 in that initial seed round in bourbon, which became Instagram. That investment ended up when they sold to Facebook, the $250,000 investment ended up returning to them $77,000. million dollars. Oh my lord. Isn't that the dude that created Netscape back in the day? Yes. That's incredible. And that's like want like they probably invested in a hundred different companies that year and like lost like 10 million or something. Right. That's really. That's how the investing game works. You want to be in the billion dollar companies and you can afford to lose a lot of money on a lot of other companies. And that's just it's accepted. That's okay. And that's why,

you know, if you're in Google, if you're in Facebook, if you're in any of these other, like, many, many billion dollar companies, like that will pay for your fund many years over. Yeah. So for us specifically, we raised a million dollars, but from like a number of different investors, the largest investor in that million dollar round put in $250,000. And there were a lot of anywhere from 5,000 up to say 100,000 from other angels. Okay. And so that's like a double-edged sword.

The good part is nobody owns so much of the pie that they're on top of us and trying to tell us what to do or anything like that. But on the flip side, there'd be times when we'd ask for advice or, hey, we're not sure what to do about this or anything like that. We wouldn't get a ton of responses from our investors because they didn't have enough of like a stake or enough skin in the game to dedicate a ton of their time to us because they had other investments that they had put more money into. All right. So you create this thing from scratch and you're getting these people, well, not from scratch, but a new entity. You're marketing the hell out of the old one. Everyone's loving it. And now you have this creative marketplace place. And then what happens? We were trying to launch a marketplace at creativemarket.com, which, by the way, that domain name was taken. So we bought it from the guy for $1,250 bucks.

Oh, nice. Which we had money to do, which was great. Right. That's one of the things. And we ended up launching this teaser site because the hardest thing when you're launching a marketplace is you have this chicken and egg problem. And if there's nobody selling stuff that you want to come buy, then nobody's going to come buy it. And if there's nobody buying stuff, then nobody's going to want to sell there. So we had to kind of grow both sides, the seller side and the buyer side at the same time.

And so we launched this teaser site where basically people could sign up, put in their email address, be notified when we launched. but they'd also get a $5 free credit to spend when we actually launched the marketplace. And not only that, once they signed up, we had this kind of like viral referer program where you could like tweet it out or share it on Facebook or like email your friends with your special code.

If you got 10 of your friends to join, you get an extra $10 to spend. If you got like 30 of your friends to join, you get like an extra $20. And so we had these different tiers. And so that worked out really well. And we started getting thousands of people signing up before we even had a marketplace launched.

That's incredible. And so while we had all these people signing up, then we started going to all these content creators, people that were selling on their own sites or on other sites. And just to give you an idea, again, this is like digital design content, things like fonts and stock photos and Photoshop files and graphics and resume templates and things like that. And we started hitting them up and we'd say, like, hey, we've got thousands of people signing up.

each one of them has at least $5 in free money to spend when we launch. There's not going to be a ton of competition with people selling to this audience. So it'd be great to have you on board as one of our early sellers. And so we started signing up people and filling up the supply side by doing that. And so by the time that we launched, we launched that teaser in January of 2012. And so by the time we launched the full site in October, we had 70,000 people that were members of the community before we even had an official website. And there's buyers and sellers? Yeah, buyers and sellers, but a majority buy.

Okay. And this is the end of 2012. Yeah. Yeah, I think this is the part, the juicy parts coming up. I love the foreshadowing, Jay Money. Because it has to do with money and that has to do with the happy ending. After this commercial break. That's right.

Go on then. On that. All right. Yeah, so we had launched it. And it was actually kind of nerve-wracking for us, because we had 70,000 people. We actually raised like another million dollars. This was probably like March of 2012.

And so this was shortly after we launched the teaser site. And we really had solidified the direction we were going. And we raised the money largely from a lot of our existing investors who wanted to, you know, get a bigger share. They were more excited about what we were doing and everything. And so we were nervous, though, when we launched, because we had 70,000 people that each had at least $5 in free money to spend. Oh, I see where this is going. Yeah, so on day one, if it was both exciting, you know, like, if I emailed you on launch day and said, like, hey, remember that free $5 I gave you? Well, now we're launched. Come back and spend it. Chances are, that would be awesome for you. You'd come check it out. But at the same time, if everybody did that, like, we could lose a lot of money on this, like right out of the day.

So you made sure everything was at least $6 and up. Right. So what happened was we sent this email on launch day and just kind of held our breath. What happened was we actually had, I think, a little over $3,000 in sales the first day. And it was about half and half people using the free credits versus paying with a credit card. We didn't know if we should look at that as a positive or a negative. Like on one hand, people didn't just cash out $350,000. But at the same time, like, okay, it's still day one of a brand new product.

And so, you know, we're still going to have to grow this from the ground level. Right. So, you know, from there, it was just a lot of, like, improving the product. every day, continuing to get more sellers that are creating content for sale on board to expand our inventory, and then continuing to get more buyers attracted and signing up that we could market to and getting them to come by more of our products. And so we launched October 2012. The first year to the day, October 2013, we hit a million dollars in total revenue. Good for you. Damn. That's awesome. So we had been growing.

every month, month over month, and one of the biggest things that it showed me is with color lovers for so long, we were trying to figure out how to build a scalable growing business. But if you looked at our revenue numbers every month between software and ad sales and things like that, it was never consistently growing. You couldn't attach like a monthly growth rate to it. But with creative market, you definitely could. And we were growing like 20% month over month every single month. And so it was clear there was a lot of momentum behind the business. People were like really excited about what we were building and it showed in the numbers. And the way you made money was, I'm assuming is it taking a percentage of whatever money is being

transacted, buying its own? Yep. Yeah. So we were just like the Apple App Store. We did a 70-30 split. So people that were selling content, they'd get 70% of each sale and we would keep 30%. And then we paid for like all the credit card fees and hosting costs and, you know, everything else marketing, everything that comes along with.

Yeah. And now you have a team, like how big is your team at this point? Like you're running a little company, right? Or is it just a... No, so our team was probably 10 people at that point. So, you know, we had hired up ahead of the launch of the teaser site, and we had continued to hire throughout 2013 as we were growing the business too. Okay.

But it was still like, you know, a small core of a team that was building the product and working on scaling the business. And your feelings towards... So you went, like, I love the lifestyle. Like, I blog and I blog and I podcast. and I don't have any like employees. I think we have people to help us. But like I don't have these employees and stress and investors and like it just scares me so much because it's like I just like doing it my way and the freedom. And now you're like, you have all this responsibility.

Granted, you're blowing up and it's doing good. But did that get to you at some point? Or were you like, I mean, you're like a laid back dude in general, but but did that play a part at this point? Yeah. So it didn't get to me. But it was definitely a different life. style than what I had before when I was just doing color lovers. And for me, like, that really happened when we started bringing on employees that I was responsible for. I had to be around during, like, I had to work, work hours, you know, and even beyond, like basically, I was working 24-7, but, you know, I always had to be present for if somebody had a question or if I had to give feedback or direction or anything like that, if I wasn't, then it could slip 24 hours, you know,

before a decision was made or before something moved. moved along. So I felt like an obligation and a responsibility to really be there for the team and to keep things moving forward at a really fast pace. And that was very different from before. It's not that, you know, I didn't work at a fast pace, but like I could work from, you know, 10 p.m. to 4 in the morning and then get up again at, you know, 10 and work 10 to 3 and, you know, whatever kind of schedule suited me that day, I could go swimming in the middle of the day and get some exercise and that's not a big deal. So, you know, it was definitely like, like a change in lifestyle there.

And it's cool that you like support this team. Like from your guys's brain, you built a company and now you're like providing to the economy, right? Like money and and also the employees, but at the same time jobs. But you know, you might have to fire them or if they do something stupid or shady, you know, like all that. Like, oh, God. Were your employees physically on site or were they remote?

So this is a good question. Because us, you know, the way we merged, businesses, the co-founders. We were all remote for a period of time. After Y Combinator, I went back to New York and lived there for three years in the city with my wife. And so we were all kind of remote and would travel a lot. And so as we were hiring people, we were initially hiring people remote because we felt like, you know, if you just try to hire, say, in San Francisco, you're competing against Facebook and Google and all these other companies for the same talent versus there's a lot of like really smart people that live throughout the U.S.

really even throughout the world, because we had some international people too, that can do really incredible work. And, you know, just so happens they don't want to live in, like, the most expensive city in the U.S. So we were remote for a period of time. And then at the beginning of 2013, we actually had enough people in the San Francisco area that we opened an office there. And we probably had six people working out of that office by the end of 2013. That's cool. All right. So 2013, you've done a million in revenue. It keeps going up. Keep going. I'm waiting for it. Yeah. So two weeks after that was on Halloween, 2013.

Leading up to that, we had been talking to a company about potential acquisition. And we knew some of the people there, some of like the internal champions at this company. And we started talking about like, okay, you know, what might this look like if creative market were to become part of this company? And so, you know, it was interesting conversations. and we were still focused on building the business, but it's kind of intriguing to us. It's always flattering when somebody's interested. Yeah, you only been doing it for a year. So we'd only been doing it for a year, but the thing that I always refer back to is, like,

my personal journey started in 1999 with Color Schemer, and it's been one long continuation of that business. So, you know, that's kind of one of the takeaways, too, is it looks like, oh, yeah, it's only been a year to the public. Yeah, but you don't. But you don't see everything that went into getting to that point. And so we've been talking to this company. And we actually kind of felt like we may have an offer coming soon from them.

So we started reaching out to some other companies, whether it was companies that we had worked with in the past as partners or others that we had connections to that might make sense because we figured, hey, if we're going to enter into any kind of acquisition talks, it'd be great to have multiple offers. And so we talked to a couple other different companies outside of that. So on Halloween Day, on 2013, there's about two weeks after we hit a million dollars in revenue, we got an acquisition offer from that first company in the morning. It just wasn't that exciting for us, ultimately.

This is kind of the roller coaster of entrepreneurship, too. Oh, you know, we're focused on building the business. Maybe we'll have this offer. Then, like, the offer comes and it's like, oh, what is it? Is it meet our expectations and everything we'd kind of been talking about? And then you look at it and it's like, eh, not interesting. So, okay. So you shift then back mentally instantly and you go like, okay, back to, you know,

building this business and growing it. Moving on. A couple hours later, we actually got a second acquisition offer from another company. And this one was actually like much more interesting for us. The first one kind of tried to screw like our team and our investors. It was like, well, we can set aside this portion for your investors. so they just kind of make their money back. And we can structure it so you guys as founders keep more of it.

And a couple million dollars here can pay for your operating expenses for your team over the next three years. And all these kind of like funny things that didn't sit right with us. They seemed really weird. And then we got the next offer. And it was just lump sum, all cash, really clean, much higher point than what the other company was offering. And so we're like, okay, like this one, we're actually. going to take really seriously. And we had to make this decision of whether we wanted to take this acquisition offer and continue growing the company as part of this new company, or continue to

stay independent. And we probably would then go raise a large Series A investment round of probably $5 to $10 million based on the growth that we've been seeing at that time. It would dilute our ownership stakes, you know, as we raise more money and things like that. But it was a very different path that we could choose in each direction. And which one did you take? So, I'm like, come on, where is it? Here it is. It actually was a really difficult decision for the three of us founders. We spent a lot of time talking about it because it's very personal, you know, for each of us individually.

It's personal for us collectively as founders. It's, you know, personal factoring in, like, our employees and our investors and making sure that they, you know, were properly rewarded for for all the time and investment and everything like that that they had put into the business. And ultimately what we decided is we decided to take the second acquisition offer that came in that day after negotiating for a little bit. And that was Autodesk. We ended up signing the letter of intent on that in November of that year, 2013. And the deal actually closed after all the due diligence and all that stuff in February of 2014. That is awesome. Congratulations again.

What at that point, are you allowed to say like how much, like are we talking millions or are you allowed to get, I don't know, like some is confidential obviously. Or can you tell us like how that works? Did you get a big chunk? And then do you have to stay on board? And how does that kind of look at that point? I can't say the acquisition price. It's millions. But I can tell you maybe a little bit about how the deal was structured and everything like that.

Fortunately, like Autodesk is a public company and it wasn't publicly disclosed by them. So I can share like the acquisition. price and stuff. Right. But yeah, so kind of like the structure of the deal is we basically got 60% in cash up front and then 20% goes into an escrow, which is paid out at the two-year anniversary. And so that's basically like if we were to get sued or, you know, have some kind of claim against us from before the acquisition happened, then that pool of escrow would essentially go to pay for any kind of like damages or anything that comes up from that. But, you know, there hasn't been anything to date. So it, you know, essentially will be paid in full.

The third piece was the last 20% is paid out as part of a holdback, which is paid out over two and a half years. Typically, we hear about earnouts that are three or four years or something like that. And so they initially offered two and a half years, which felt very fair to us. They had the full 20% paid out at the two and a half year mark, and we basically just negotiated that we would get 25% of that 20% on year one. 25% on year two, and then 50% at the two and a half year mark. Okay, that's cool. Yeah, and so it's not tied to any metrics or goals or anything like that.

The purchase price more than factored in a lot of growth that we were expected to have. Like, there was no way to justify the purchase price based on the metrics that we had at the time. So it was like we felt like it was building in a lot of future value and upside to the business. we felt like for our employees, you know, their equity would be worth something, which is really great, and they would be happy about it, and our investors had a really nice return too.

So, you know, all of those things felt really good for us. One of the biggest things, you know, that we were thinking about also was kind of like the culture fit going in. And so the first company that we were talking to, they were kind of like, well, how many people do you really need on your team? Oh, Lord. And that didn't really sit well with us. They'd ask us to like rank all the different people.

and in order of importance and who do you really need. And when we were doing the due diligence with Autodesk, we went in and we talked to their HR mergers and acquisitions people for a couple hours. And they asked kind of the same question. They're like, okay, so go ahead and rank your people here. And we were like, ah, we're really not comfortable doing that. And they were like, no, no, no, this isn't like who gets voted off the island. This is who do we want to incentivize to stay on the island with us?

So ultimately it just felt like the culture felt very different. It felt much more like our culture. You know, Autodesk's mission is imagined design and create a better world. And at Creative Market, we always said that our vision was to make beautiful design simple and accessible to everybody. And so, you know, it just felt like there was this really good fit there and personalities culturally, everything like that. And, you know, now I can say I'm two years in at this point. I'm still really happy getting up in the morning and coming to work and this, like you were saying before, this is my first time ever having a boss. And actually, my first time ever working in an office every single day.

A lot of changes for me, kind of getting later in my career here. But it's been really great. And part of what I talked about before with wanting to get the new experiences and grow and everything like that, you know, the business has continued to grow really quickly. my boss has always just said, just keep growing and given us the resources to do that. So it largely feels like we're still an autonomous startup team that gets budget to do things where I can hire people and I don't have to worry about, well, if I bring this person on, it's going to cut our runway by three months and gets us that much closer to running out of money or having to go raise more money from investors.

I don't have to deal with any of the stresses of that because we're backed by a Fortune 500 company that gives us the resources that we need to continue to keep growing. Yeah, you get to focus on what you're awesome at. You know, that's what you're good at. Yep. And I'm learning a lot. I'm learning a ton. I'm seeing things from the other side. You know, what does it look like? What do what does a big company evaluate when they're looking at acquiring a startup? So that's opened my eyes to a lot of things. So I'm really just, you know, I still feel like I'm learning so much. And the same thing that I want for our team is the same thing that I see for myself, which is I want people to go to bed on Sunday night and be really excited

to wake up and start work on Monday rather than, you know, like my favorite movie is office space. So led me down the path of, you know, color schemer and doing that lifestyle business for a long time, dovetailing with my dad's story. But, you know, I don't want anybody to have a case of the Mondays. So the culture and environment that we really try to create. And we were about 13 or 14 people when we were acquired in February 2014. And now we're about 27 people with a couple more starting soon. So at each stage of the business, I've had to learn how to scale a business. I'm no longer just managing individual contributors.

I'm actually managing managers at this point. So there's just a lot of things where I'm getting new experiences every day and feel like I'm continuing to grow. And that's the kind of stuff that makes me happy. Yeah, that's the good ending right there, man. That's what we are all leading up to. That's a really great ending. And on a person, well, two things.

One, when you sell a company, I mean, there are times where they just come in and buy it if they're stupid. And then they're like, all right, well, we got it from here. And then everyone goes on their merry way with money in their pockets. Like, you chose the route where everyone can still work. So you got like the people that work there, especially the founders, got a big chunk of money. And then you guys get paid on top to physically work at the company that you're already working at. Yep. Which is really, I mean, that's like a fascinating.

And if at any point you guys leave, you still have that chunk of money and you're not tied in or I know there's like incentives for like some people to stay. But at this point, you guys can do whatever you want. And I imagine not every single person stayed on. So most of them stayed on. There were maybe one or two people during like in the transition process, you know, the first two or three months after the acquisition where, you know, they kind of felt like, eh, this wasn't really what I signed up for to go be part of a large company. And, you know, we totally understand that. But for the most part, there's a lot. a lot, like a big chunk of the team right now are people that were even there in, you know,

pre-acquisition days. So we've, we've been able to retain a lot of, you know, our best talent. And that's really why we've been able to continue to be successful as part of Autodesk, too. There's this talk that I've given a few times where I talk about like this whole story and from startup to acquisition. One of the slides that I put up is like a picture of palm trees and a beach with like a hammock on it. And I say, you know, most people think that post-acquisition life looks like this. But the reality is the best situation that you could hope for is to be able to continue working with the same team, serving the same community, building the same product, and having the resources to continue to grow. Because ultimately, I'm still, you know,

super passionate about this business that we've been building and the community that we serve. You know, we've got people that are making hundreds of thousands of dollars a year, selling content on creative market. Those are like life-changing opportunities that we're creating for people, which is really meaningful work for me and for the team as well. To be able to continue to do that is just like the ideal scenario there. And the other weird thing is the type of people that normally build large businesses are not the type of people that want to just go lay on a beach somewhere. So as much as I love spending time on a beach, at some point I would get bored doing that and would want to, again, find a new way to keep growing.

And on a personal level, personal finances, so I would imagine if you weren't a millionaire before you hit that point, like, it's safe to say that your personal wealth is a millionaire plus. Is that correct? Yeah. The budgets are sexy millionaire club? Yeah. Are you a part of a millionaire club?

Because you got to number one now. No, but you can, oh man, now you screwed up my thinking, Paul. Oh, that's what I say. we talk about financial freedom a lot. And again, it's like so many of us rush and we're like, oh, good. Like we're looking for like we need like $1.7.5 million and then we can retire and do whatever we want. Right. Even though entrepreneurs will just start something else.

But technically for where you are now, like if you wanted to and you got lazy and you know what, I'm not going to work for the rest of my life. Like you've set yourself up for the long term based on your personal finances now. Is that a good statement? Yeah. And so that was a big factor for me personally in deciding to take the acquisition. I felt like the business was going to be continuing to grow quickly and would be worth more like a year from that point than it was at the time that we took the acquisition. But at the same time, there's a lot of like additional risk that comes with that. You know, I always felt like this would be life-changing money that would, you know, and sort of going back to like the lifestyle business that I was running where, you know, really what I wanted was the first.

freedom to decide how I was going to spend my days, what I was going to work on and everything like that, rather than going back to my dad's story, having a job or the need for making money or something like that dictate for me how I was going to be spending my days and nights and weekends. The ironic thing is, you know, during all those years from Y Combinator through the acquisition, I was working 24-7 at nights weekends. Everything. I could not shut it off. The nice thing, you know, not everybody has the happy end. Like so many people work those crazy hours, you know, that I worked and they don't get the happy ending here. And so we were looking at this potential happy ending.

And I just kind of felt like I don't need to be super greedy, you know, with the billion dollar company here. You know, this was life-changing money for me, my family, my future kids, all that stuff. And that was worth it to me to get the freedom to have the flexibility to decide how I wanted to spend my days and what I I wanted to work on. Yeah. And I'll say too, like you're like just knowing you in real life. Like if I like even when we met, we played football together and we go to bars, like you're not like a super flashy like roll up in a Porsche and drop thousands on fancy liquor. You know what I'm saying? Like you live a pretty, at least from what I know, a frugal, normal lifestyle. Totally. Like your car was like, you know, it was an older beat up car. And here you are with like millions in the bank or however much, you know, which goes, which is something in us like, you know, the millionaire next door, like the people that aren't flashing it all over. You know, are the unassuming ones, but like, you know, like, you're not, you could tell, like, you cared about your people. You weren't in it to just make money and then stop and then, hey, I just want money, money,

money. Like, you have a point to the money. Right. Yeah. And so a couple of stories related to that. So, yeah, I've always been a saver. And I always look at money as an opportunity cost. My wife doesn't.

You know, she could see something that was like a thousand, a shirt. It's $1,000, but 90% off. So now it's $100. And she's like, it's such a good. deal. I have to buy it. And I'm like, yeah, but it's still $100 for a shirt. Like, that's crazy. So, like, that's the difference in how we look at money. You know, so following the acquisition, it took me more than a year before I actually splurged on something, which was I bought a guitar that I'd wanted for years, and it cost $4,000. And so it took me forever to, like, you know,

work up the courage to spend that money on that rather than, like, continue to save it. And, yeah, like my car, I ran that thing into the ground until I moved out to San Francisco a year and a half ago. And so, yeah, I'm always a saver and having, you know, more money in the bank hasn't really changed that about me. One thing that I did notice is I will now optimize for quality of life more rather than pinching pennies. So sometimes like if I'm taking Uber somewhere, I'd catch myself because I'd be like waiting for 15 minutes for a surge to go down like 0.2 or something, you know, which is going to save me like two. bucks, right? And it's just ingrained in me to like always do that and wait it out and sacrifice my time to save two bucks or something. Then I realized like, wait a second, like I don't have to worry about this. You know, like if there's like a 1.2 surge on the Uber I need to take, like I'm just

going to do it and not let it concern me. So those kinds of things, you know, I'm, I ignore those a little bit more than I used to before. No, that's a good point. I mean, that, again, the power of money and using it to better quality of life and you're doing it. Yeah. Yeah. Paula and I like to debate on a lot of this time. I stopped in earlier episodes. Yeah.

Awesome, dude. Well, we have, oh, were you going to, I don't know if you have questions, Paul. I was going to do the whole speed round thing. That's exactly what I was just thinking. Look at that. We're doing good on this podcast thing. So, Aaron, we like to ask like four or five questions at the end that you just answer, you know, it's top of your head, fast, whatever comes to mind.

None of them are going to get you in trouble, so you don't have to worry about that. Okay, good. But let me know, yeah, all right, you ready for him? I'm ready. Hit me. All right. Well, here, let me start with an easy one. Kittens or puppies, which one is cuter?

Puppies. Yeah. You have a puppy, though, don't you? I do. I forgot about that. But as I always wanted cats, but my dad was allergic, so I couldn't. All right. What is your favorite alcoholic drink of choice?

Um, normally beer. But if we're talking liquor, I'd say like 7 and 7. Seven. Oh, that's a classic one. You know, my parents drink that. They're the only ones I know. Well, now I know you. Awesome.

Me and your parents. We've got a lot in common. I've never heard of 7 and 7. What is that? It's Seagram 7 and like 7 up or Sierra Mist or whatever kind of lime drink. Yeah. It's like a light mist. kind of. It's good. Like for like summers

it's good, right? Yeah, that sounds nice. That sounds like the palm tree and beach drink. Yeah, it's like a 7-Up whiskey kind of thing. Yeah. All right. What's the weirdest thing in your house? It's probably something my wife bought. Okay, so just turning around and looking behind me,

there's like a bird cage thing without a bird in it. It's got books in it, and it's got like candlestick in it. And I'm not really sure what it is. An empty birdhouse with candles in it. Sounds kind of artsy. Yeah. It is.

Like, it looks kind of cool, but, like, I never would have thought to do. Yeah, what happened to the poor bird in it, man? What'd you guys do? All right. All right. This one's a little trickier, but what's the stupidest mistake that you've probably made in business? It doesn't have to be anything major, but, like, what's something that was pretty, you know, lame that you wish you didn't do? I guess I would say the biggest thing that comes to mind is, you know, I spent a lot of years not growing personally in business.

So kind of like not taking more initiative on that stuff earlier, you know, being too comfortable, especially at a younger age, which is like the ideal time to be growing your skills and experience and stuff. Right. Before kids and big mortgages and all that kind of. And how old are you now? You're like in mid-30s, yeah? Yeah, I'm 34. 34. I will call that early 30s. Okay.

I appreciate that. Because I'm 36. I'm right over the hump, but I still call it early. Because I forget, I just tell people I'm still like 34, 35. And my wife's like, dude, you're like closer to 40 now. All right. Last question. If you had to start a company, would you start with Zuckerberg or Barack Obama?

If I was starting a company, I would probably. I'd prefer to work day to day with Obama probably. But Zuckerberg, I think, if I wanted to build a big company, like how could you go with anybody else? Yeah, that's true. Well, dude, man, thank you so much for taking the time. And I haven't heard a lot of these stories. So I learned a lot and hopefully the people listening, you know,

got some good stories on business and how to be frugal. A frugal millionaire. We'll just call you a frugal millionaire now. Thanks. That's a compliment for me. I appreciate that. That's right. Thanks so much, dude. I appreciate it, man.

Yeah, thank you. Yeah, it's been a lot of fun. Thank you both. We'd like to thank our sponsor, somebody. We finally got a sponsor, which is fantastic because it means that we can start paying our producer, Steve, in real money, rather than just cat food and kisses. Our sponsor is an awesome company called Digit. A company that helps you automatically save money.

You link Digit to your checking account, and small increments of money, two bucks here, four bucks there, flow from your checking account into your digit account. You don't notice yourself saving until one day, six months from now, you wake up, check the balance in your digit account, and notice that it's grown pretty substantially. Check them out and sign up for free by going to themoneyshow.com slash digit. That's themoneyshow.com slash d-igit. They didn't actually ask me to sing him a jingle.

I just like that part. If you enjoy the show, please also do two things for us. Number one, subscribe to the show on iTunes. And number two, leave us a review. Thank you so much. We really appreciate listening. You know, it's funny. So my wife, but I told her that we were going to bring you on here.

She's like, all right, well, I'll listen to that one. No, I just want to hear Aaron's story. I really don't understand it yet.